Detroit’s Creditors Cast Votes on Bankruptcy Plan

by San Antonio Attorney

Creditors submitted their final votes on Detroit’s debt restructuring plan last Friday. The total tally of votes is expected to be filed with the federal court on July 21.

According to some of the parties involved in the bankruptcy proceedings, based on the updates they got during the voting period, the plan was well received by the retirees and workers. An unofficial vote count showed in favor of the city’s plan.

Nevertheless, others involved in the process advised that there is still no final tally available and that a considerable number of ballots had came in on Friday. The counting of ballots is held at the California company.

Detroit, which became the largest city in the United States to seek bankruptcy protection last year, is aiming to leave bankruptcy and emerge from the conduit of an emergency manager come fall season.

The vote is crucial for a number of reasons. One of it is for a federal judge to take the plan into consideration.

If workers and retirees support the plan, it will provide millions of funding from foundations and the state won’t have to make deeper cuts to pensions and the city’s art collection will be saved. A favorable vote from retirees and workers would also demonstrate public support for the city’s plan that has been very controversial for its pension cuts, even with the State Constitution’s protections.

There are workers and retirees who are against the pension payment cuts, but believed that the proposal, together with the foundation and state funds, is probably the best offer they could get.

After several months of mediation, Detroit garnered endorsements from leaders of unions, pension boards and retiree groups, although they had some reservations.

Leave a Comment

Previous post:

Next post: